Detroit Casino Bias Ruled Illegal

Published 8:00 pm, Thursday, January 10, 2002

Associated Press Writer

The city of Detroit violated the U.S. Constitution by giving two companies preferential treatment when issuing licenses for casinos there, a federal appeals panel ruled Friday.

In a 2-1 ruling, the 6th U.S. Circuit Court of Appeals in Cincinnati overturned a federal judge who upheld a city ordinance favoring the companies. The panel returned the case to the lower court for further consideration.

Detroit's ordinance gave preference to two companies that helped support a 1996 statewide ballot measure approved by voters that allowed off-reservation gambling in Detroit. The measure specified that only three casinos could be built.

The Lac Vieux Desert Band of Lake Superior Chippewa Indians argued the ordinance discriminated against the tribe for failing to take the correct position in the political debate over legalizing off-reservation gambling. The appeals court agreed.

"By employing the preference, Detroit basically sought to end the high-stakes competition for two of the three Detroit casino licenses before it really began," Chief Judge Boyce F. Martin wrote in the majority opinion.

"This we cannot allow. Barring governments from endorsing or punishing political activity, or the lack of it, is among the paramount functions of the First Amendment's Free Speech Clause."

The two companies, Greektown Casino LLC and Atwater Entertainment Associates LLC, helped place initiatives on the city ballot, then organized support for the statewide referendum. They were awarded licenses along with MGM Grand, which did not have preferential status.

The Lac Vieux Desert tribe runs a casino in Watersmeet with 621 slot machines and 21 table games, according to the Michigan Gaming Law Website. In contrast, the three Detroit casinos now operating each have around 2,500 slot machines and nearly 100 tables.

Millionaire businessman Don Barden also had challenged Detroit's selection process for casinos. A federal judge threw out that suit in 1999, saying Barden had signed away his right to sue when he applied for a casino license.

The appeals court upheld that ruling the next year and found that Barden had suffered no injury.

After his rejection, Barden proposed a colossal, $1 billion entertainment-and-casino complex, bankrolled in part by Michael Jackson. His efforts led to a 1998 ballot issue that would have required a license be given to a black majority enterprise, notably his. Voters rejected that proposal.